(Reuters) - Edwards Lifesciences Corp (EW.N) on Monday reported higher-than-expected quarterly earnings, but investors were disappointed with the pace of U.S. sales of its newest artificial heart valves, sending its shares down more than 4 percent.
U.S. sales of those valves, which are implanted in a less-invasive procedure than traditional open-heart surgery, were $86 million in the third quarter, up about 56 percent from a year ago, but a little short of what investors were expecting.
Edwards was first on the U.S. market with the alternative approach to heart valve replacement when it introduced its Sapien transcatheter device in late 2011. The valves are threaded into place through an artery via a catheter.
But adoption of the product has been slower than expected due to the weak economy, time involved in training doctors on the procedure, and concerns about the cost of the technology.
Analysts asked on a conference call whether sales of transcatheter valves might be reaching a plateau.
"We still have a young procedure that we believe is getting considerably better on a consistent basis," Edwards Chief Executive Officer Michael Mussallem said on the call, "so we think that's really what will provide the underlying lift for continued growth next year."
The implants have demonstrated high success rates, with about 15,000 U.S. patients receiving Edwards' transcatheter valves over the past two years, he said.
Edwards, based in Irvine, California, said its third-quarter net income rose to $77 million, or 68 cents per share, from $69 million, or 58 cents per share, a year earlier.
Analysts on average had expected a profit of 66 cents per share, according to Thomson Reuters I/B/E/S.
Overall sales, which include surgically implanted heart valves, rose 11 percent to $496 million. Sales of transcatheter heart valves alone climbed 39 percent to $172 million, boosted by strong growth in Europe.
"While we view these results as good, we believe expectations heading into the quarter were relatively high," BMO Capital Markets analyst Joanne Wuensch said in a note to clients.
Edwards confirmed its full-year outlook for earnings of $3.00 to $3.10 per share, excluding special items, on sales of $2.0 billion to $2.1 billion.
The company said the full-year forecast assumed U.S. sales of its transcatheter heart valves would be at the low end of its previous expectations of $350 million to $400 million.
Edwards said it still expected mid-2014 U.S. approval for its next-generation Sapien XT transcatheter valve.
Shares of Edwards were down 4.3 percent at $73.75 in midday trading.
Reporting by Susan Kelly in Chicago; Editing by Lisa Von Ahn and Maureen Bavdek